One Day Stays – How vulnerable is your organization?
The following PYA Alert is the second release in a series on the topic of Recovery Audit Contractors (RACs).
During its 3-year demonstration project which ended in March 2008, a large focus of the Centers for Medicare and Medicaid Services’ (CMS) Recovery Audit Contractors (RACs) initiative has been the overpayment of claims for outpatient services provided (e.g. wrong patient status – inpatient vs. outpatient). An estimated one third of improper payments identified during the demo stemmed from patient chart documentation failing to support medical necessity for a particular service or setting, such as with one day stays. Significant findings such as these, coupled with the traditional struggle for correct patient status assignment and accompanying supportive documentation – and the added fact that the RACs are paid on a contingency basis for the percentage of errors identified – make it easy to understand why this has become an area of focus. That is why effective case managers serve an increasingly critical role in ensuring patient admission to the appropriate level of care, physician documentation for medical necessity, and accurate admission orders on the chart.
Even prior to RACs, the Office of Inspector General (OIG) demonstrated an interest in the appropriateness of one day stays. As an example, an Atlanta area hospital settled for $26 million in December 2007, concluding an investigation of inpatient claims billed for outpatient observation services provided. Other organizations can benefit from this mishap by ensuring that strong internal controls are in place for inpatient medical necessity management, appropriate admitting documentation, and the correct coding of claims.
CMS regulations outline that physician admit orders must specify patient status, such as, “Admit to Inpatient” or “Admit to Observation”. The days of routinely vague physician documentation, left open to interpretation such as “Admit”, should be history. Organizations otherwise place themselves in jeopardy for future CMS recoupments. Similarly, when inpatient or observation admission orders follow an outpatient procedure, clinical documentation must correctly reflect medical necessity for severity of illness and intensity of service.
Case Management activities which can decrease your vulnerability include:
- Identifying and clarifying admissions orders prior to admission
- Ensuring consistent application of medical necessity criteria amongst case management staff
- Providing access to case management staff at all points of entry to facilitate collaboration on the admission status
- Developing physician documentation prompters to ensure complete documentation
- Educating physicians and staff regarding medical necessity documentation for inpatient admissions and/or determination of observation status
- Familiarizing case management staff with those diagnoses most frequently admitted as one day stays in your hospital, as well as related CMS regulations and condition code 44
PYA’s team of Clinical Compliance and Reimbursement professionals can help 1) assess your risk for billing and coding compliance, 2) identify areas of potential overpayment risk, 3) realize process improvement opportunities, and 4) educate your staff to ensure compliance within your organization. For more information about our RAC preparedness services, please contact the experts listed below at (800) 270-9629
The information provided via PYA Alert, Tax Planning Alert, or Audit and Accounting Alert should not be construed as accounting, auditing, consulting, or legal advice on any specific facts or circumstances. The contents are intended for general information purposes only. Please contact us at (800) 270-9629 to discuss your specific situation or to discuss any specific questions you may have.
